Vietnam 20241010: Loquacious, Scintillating, Effulgent
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Headlines:
Economic Growth Targets Ambitious but Doable
FDI Inflows Surge Despite Global Lethargy
Infrastructure Development Accelerates
Real Estate Market Shows Mixed Signals
Coffee Exports Reach New Money Highs
Wind Power Import Price Peg Set
Carbon Market Pilot from 2025 to 2028
Inflation Approaches Target Range
Industrial Production Grows Steadily
Foreign Tourism Rebounds Strongly
Regional Cooperation Strengthens: BN, TH
Semiconductor Industry Set for Expansion
Premium Rice Breaks into Japan’s Picky Market
Chinese PM Li Qiang to Visit Vietnam
Economic Growth Targets Ambitious but Doable
Vietnam is looking for at least 6.5% GDP growth in 2025, with aspirations to reach 7.5%. The IMF is foreseeing 6.1% growth this year, while UOB has raised its forecast to 6.4%. The government is pushing for better than 7% growth in 2024, with Q3 showing strong momentum at 5.66% expansion. Positive economic indicators and recovering export demand support these targets, though challenges in household spending and SME performance remain dogged.
Read more: The Investor (2025 Targets), Thailand Business News (IMF Forecast), VN Economy (UOB Forecast), Nhan Dan (Government Push)
FDI Inflows Surge Despite Global Lethargy
Inbound foreign direct investment reached nearly $25 billion in the first three quarters of the year, up 11.6% over last year’s benchmark. The growth comes despite global economic weakness, and is being credited to Vietnam's attractiveness to international investors because of location, improving infrastructure, and skilled labor force development.
Read more: VnExpress (FDI Surge), Vietnam News (Investment Details)
Infrastructure Development Accelerates
The government is pushing to complete major transport projects 3-6 months ahead of schedule. Plans include expanding the expressway network to 3,000 km by 2025 and 5,000 km by 2030. The $15 billion Long Thanh International Airport near Ho Chi Minh City is a cornerstone project. Problems include land acquisition and construction material shortages. Railway and aviation sectors are seeing significant developments, including operator mergers and new international routes.
Read more: VN Economy (Da Nang Free Trade Zone), Nhan Dan (Hanoi Infrastructure)
Real Estate Market Shows Mixed Signals
The real estate market is, as usual, still showing varied trends across regions and segments. HCMC's primary market house prices dropped for the first time in seven quarters. Hanoi's apartment prices pressed ahead by 30% over the past year. The southern market is picking up, with higher demand for land and affordable housing. The condotel sector is facing liquidity issues, with Q1 sales at a six-year low.
Read more: VnExpress (HCMC Prices), Vietnam Insiders (Hanoi Prices)
Coffee Exports Reach New Money Highs
Coffee export income has been booming this year, due to price increases. In the first nine months, the country exported 1.12 million tons of coffee, valued at nearly $4.37 billion. Despite a 10.5% decrease in volume, the export value increased by 39.6%, surpassing the total 2023 export value of $4.24 billion.
Read more: VN Economy
Wind Power Import Price Peg Set
The renewable energy sector is growing rapidly, with investments in solar, wind, and hydropower projects. The government is pushing for direct power trading agreements to stabilize the market and attract private investments. Efforts in Tra Vinh and central Vietnam focus on wind power projects, while national plans call for increased hydropower capacity. A price for wind power imports from Laos has been pegged at a seemingly very reasonable 6.4 U.S. cents per kWh.
Read more: The Investor
Carbon Market Pilot from 2025 to 2028
Vietnam will pilot its carbon market between 2025 and 2028, as part of efforts to meet net-zero emissions targets by 2050. The government wants to establish an efficient carbon credit trading system, encouraging businesses to reduce emissions and invest in sustainable practices.
Read more: Vietnam Economic Times (Carbon Market Pilot)
Inflation Approaches Target Range
The consumer price index (CPI) rose by 3.88% year-on-year in the first nine months of 2024, getting close to the government's target of 4-4.5% for the year. The Q3 CPI was lifted 3.48% versus the same period last year, mostly thanks to rising food prices in areas affected by Typhoon Yagi, as well as housing and education services costs.
Read more: The Investor (Inflation Data), Nhan Dan (Q3 CPI)
Industrial Production Grows Steadily
Industrial production index (IIP) grew 8.6% year-on-year in the first nine months of 2024, a continued recovery in the sector. The September index fell 0.2% from August, a minor bump of some month-to-month volatility. The overall trend remains positive, supporting economic growth targets.
Read more: The Investor
Foreign Tourism Rebounds Strongly
Vietnam is shooting for as many as 18 million foreign tourists through the end of this year, according to the Ministry of Culture, Sports, and Tourism. This heady number is in light of the strong recovery in the tourism sector following the Covid thing that we’re all trying to put behind us. The country's attractions and improving infrastructure are said to be the main factors in drawing international visitors.
Read more: VN Economy
Regional Cooperation Strengthens: BN, TH
Vietnam is actively engaging with regional partners to boost economic cooperation. Recent meetings between Vietnamese Prime Minister Pham Minh Chinh and counterparts from Singapore, Thailand, and Brunei focused on strengthening trade, investment, and strategic partnerships. Discussions covered areas such as digital economy, green growth, and regional stability.
Read more: VN Economy (Brunei Meeting), DTI News (Thai Meeting)
Semiconductor Industry Set for Expansion
Vietnam plans to establish more than 20 semiconductor plants by 2050 as part of a strategy to grow the industry. The three-phase roadmap is expected to build foundational capabilities across the entire semiconductor value chain. Goals include setting up 100 design companies, one small manufacturing plant, and 10 packaging and testing facilities by 2030.
Read more: TrendForce
Premium Rice Breaks into Japan’s Picky Market
Vietnam has successfully introduced its second rice brand, "Viet Uu," to Japan, penetrating one of the world’s most selective and demanding markets. This win follows on the initial success of the ST25 rice variety, another feather in Vietnam’s agricultural export portfolio cap. Meeting high Japanese quality standards, this breakthrough is expected to boost Vietnam’s position in high-value rice markets and improve its reputation as a competitive rice producer.
Read more: VN Economy
Chinese PM Li Qiang to Visit Vietnam
Chinese Premier Li Qiang is scheduled to make an official visit to Vietnam from October 12 to 14, his first trip to the country since taking office in March 2023. The visit, at the invitation of Prime Minister Pham Minh Chinh, is expected to focus on bilateral ties and discussions of regional issues of mutual interest.
Read more: Tuoi Tre News
And now for something completely different.
While the focus of The Memo is on news for business, we often wrap with a less business-focused article. Three additional articles you might find of general interest are a push from Gen Z to get into the coffee biz (short article and link to video), a beautiful photo montage of HCMC traffic by drone (beautiful as long as you’re not sitting in it), and a report on second thoughts about zero tolerance for drunk driving (something, something, law of unintended consequences…)
That’s it for this week!
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